Marketing
Domain 2 tests marketing principles and the classroom application of market research, segmentation, positioning, the marketing mix, consumer behavior, branding, and digital/e-commerce channels.
Core rules and concepts
- The marketing mix is product, price, place, and promotion; services add people, process, and physical evidence.
- Useful segments are measurable, substantial, accessible, differentiable, and actionable.
- Positioning is the place a brand occupies in the customer's mind relative to competitors.
- The product life cycle runs introduction, growth, maturity, decline; strategy changes at each stage.
- Pricing options include cost-plus, penetration, skimming, value-based, and psychological pricing.
- Promotion blends advertising, personal selling, sales promotion, public relations, and direct/digital marketing.
Worked example
A retailer buys an item for $60 and wants a 40% margin on selling price. Price = cost ÷ (1 − margin) = $60 ÷ 0.60 = $100. A 40% markup on cost would instead be $60 × 1.40 = $84. The distinction is the trap: margin is a percentage of price, markup is a percentage of cost. At $100, gross margin is $40, or 40% of price; at $84, markup is $24 on cost, but margin is $24 ÷ $84 ≈ 28.6%.
Traps that cost marks
- Treating features as benefits; customers buy outcomes.
- Confusing primary research (surveys, interviews) with secondary research (published data).
- Using penetration pricing when the objective is prestige, or skimming when the goal is rapid mass adoption.
- Equating a target market with a market segment.
- Ignoring channel conflict when adding direct online sales.
In class, have students build a one-page mix for a local business and defend each choice with evidence.